HK Social Enterprise Summit 2009

8/14/2019 HK Social Enterprise Summit 2009

1/15

Dr Jane Lee, Director, HK Policy Research Institute

o There are 350 conference participants, including over 80 reps from

HK, Macau, Taiwan and mainland China. This summit has become

an importantant of cooperation between the 4 places. There are

also about 40 students from HK who will be interviewing participants.

o The success of social enterprise relies on innovation and

entrepreneurship. We need support from the business sector, and

there will be several sessions related to investment. Partnership

involves regional and international cooperatiion.

Chang tak Seng, Secretary for Home Affairs, HKSAR Government

o The government has already approved HK$88 million into SEs, and provided 100,000

jobs for the underprivileged. In addition, a SE advisory committee wil be formed to

formulate policy, with representation from various sectors.

o We have this atitude to make the most money in the least time. But SE is teaching us

new values, in being a social citizen.

HK Social Enterprise Summit 2009 (13-14 Nov 2009)


2/15

Ms Teresa Au, Head of Corporate Sustainablity, Asia

Pacific Region, HSBC

o HSBC-SEBC will be a consultant to SEs. It has engaged 610 Social

Angels, to help SEs from all sectors in the areas of administration,

product design, and marketing. Such assistance will enable the social

entreprises to be more creative, and to enjoy sustainable

development.

Dr Darwin Cheng, Chairman, HKU Space

o HKU Space is an education institution with a strong social mission,

and now a social enterprise which is completely self-financed. While

they looked at traditional business tools such as Michael Porters

strategy for competition, as well as Blue Ocean Strategy, SE is a

hybrid between the business and traditional nonprofit worlds.

Kim Alter, Managing Director, Virtue Ventures LLC, &

Visiting Fellow, Skoll Centre for Social Entrepreneurship

o Kim started by showing a video about a B Corporation called Greyston

Bakery, a social enterprise whose profits go to Greyston Foundation.

Said Julius Walls, its former CEO: We are not in the business of

baking brownies, we are in the business of transforming lives.

o She started a SE 20 years ago, to send development propfessionals to

Africa. She did a MBA to get business skills, but there were no socially-

oriented MBAs then.

o She said that a Confucius with a MBA is the hardest person to find,

which became the conference catchphrase.

o The social problem is the business oportunity. It has to be anchored in

the mission, to prevent distractions. Mission accomplishment and

business performance should be going in tandem. If the business

grows, you have greater social benefit over time.

o SEs are really an opportunity to create value down the entire value chain . SEs can source from

environmental sources, provide employment for disadvantaged individuals, use democratic governance

systems, plow back the economic profits back into the SE and to ethical investors.

o We should not look at subsidies with a wary eye. Philanthropic capital is all around us, and is a viable source

in your funding mix. Costs for a SE increase due to having to provide extra training, provide wage premium

to clients, soft skills training, job coaches, counselling and health services. These social costs can be

allocated separately and subsisised with grant funding.

o Kim also presented Venturesource, a newly developed online resource library for social enterprise.


3/15


4/15

Joseph Ngai, Director, Social Ventures HK

o HK has a business world with very thin margins. Breaking even is

very difficult. We hear these success stories, but we never hear

cases of failures. A regular business may require a B-grade

businessman to succeed, but a SE requires a B+ or A- business

person to make it work.o They initially started with transitioning social services into SEs, but

it was a failure. You really need a person with tenacity and skills to

move it forward. Its about cultivating a new generation which

blends both social and business concerns. Pure businessmen

dont necessararily succeed.

o How do you measure your Social Return on Investment? It

depends on the business. Metrics is a long discussion. Its so

specific to each organisation, unlike microfinance. There are no

universally-recognised metrics.

o UK is the worlds best environment for enabling SE, with government support, grants, and legal structures in

place.

o Is the goal of a SE to minimise subsidies, so that it can be truly self-sustaining? We think subsidy is a bad

thing, but we have a big philanthropic market. Corporates use subsidies as well, just that were using a

different kind. The more money you make, the more social good you can do. Some business types have

more innate opportunities to make money trying to commercialise human rights is very hard!

Ms Wang Ping, Founder & Chairperson, China Social Entrepreneur

Foundation (YouChange)

o Wang Ping talked about SE and its relationship with public philanthropy. Warren

Buffetts concern was that his donation to Bill Gates Founation be professionally

managed, so did not start his own foundation.

o We have seen many changes in the conditions for SEs, and we need a world in

which spiritualism and materialism can be in balance.

o Many people believe that SEs may affect credibility of charities. But since SEs are

a form of social innovation, we need to provide enough room for flexibility. Source

of social capital has been changed, due to internet.o New philanthropy it mobilises social forces to solve problems. Government enterprises are also driving

forces. Brave enough to take the lead in different areas. We need to nurture innovative talent.


5/15

Dr KK Tse, Chairman, HK Social Entrepreneurship Forum

Identified 10 green shoots of social entrepreneurship evident in HK in the past few years:

o From emphases on social enterprise to social entrepreneurship a paradigm shift

o Growing number of non-government-funded social enterprises

o Self-strengthening of government-funded social enterprises the founding of the Hong Kong General

Chamber of Social Enterprises

o Growing number of platform organizations supporting social entrepreneurship

o Growing business support for social enterprise development

o Growing number of civil society organizations supporting the development of social entrepreneurship

o Growing recognition for the achievements of local social entrepreneurs

o Growing number of publications and media coverage

o From charity to venture philanthropy modest but bold steps (cited SOW Asia as pioneer in VP in HK)

o HKSAR government entering a new phase in promoting and supporting social enterprise development

These are some of the Green Shoots emerging in the Hong Kong scene. Despite its short history, social

entrepreneurship is beginning to make its presence felt in the community. However, they are but a few initial

steps in a very Long March. Here are some major challenges and opportunities ahead:

o Creating a social capital market

o Making more creative use of government funding and policy support

o Enabling universities to make significant contribution to the social entrepreneurship movement

o Engaging young people as leaders of positive social change (highlighted Ashokas Youth Venture and

Jossy from Taiwans Flow as examples)

o Facilitating exchange and mutual support among social entrepreneurs in Greater China region.


6/15

Prof Yu-Yuan Kuan, Department of Social Welfare, National Chung

Cheng University

o The most salient type of SEs in Taiwan are work integration SEs dedicated to

employment and poverty alleviation. Governments value highly this type of SE, as

evidenced by the subsidies available.

o However, even among work integreation SEs, a significant number of NPOs have

become relatively dependent on government grants and subsidies, though some are

more reluctant to receive governments help and would rather stand on their own

feet by creating their own resource networks.

Ren Xuping, Chairman, Sichuan Xuping Rabbit Industrial Corporation

o A zootechnician, Red started his rabbit breeding career in 1980 using 12RMB, taking a

childhood pastime into a fullscale industry and becomgin the China Rabbit Ling.

o His company is the only in southwest China with the characteristics of Business Entity

+ Social Enterprise + NGO.

Kenny Low, Principal & CEO,

City College & O School

On social enterprises: gangs are people-

centred, values-driven organisations too


7/15

Ted Tam, social work supervisor at Youth Outreach

o Youth Outreachs major task is outreach to youth at risk. They are going

into business now because street youth, who are regarded as a

subculture, find it difficult to use their skills to find jobs.

o School of Hip Hop & ArtAlive Studio bring youth culture to the market.

Young people didnt know about the market, but are now taught how-toskills to market skateboarding, graffiti, stage lighting, audio setup, BMX.

o They discovered that not all these services are needed by the market,

and that youths dont understand customer service.

o As hes a social worker, they dont know how to run a business. And they

cant provide a pure commercial approach either, as they need to service

the youth. They need to have non-social work people to teach social

workers how to run a business.

Kee Chi Hing, Director, Fullness Hair Salon

o Serves young people who are released from prison. Each inmate will use about 250K of

taxpayers money. Inmates taken up as apprentices for 18 months, only a few thousand

dollars a month. A lot of youth dont have self-confidence in themselves.

o Did a market study on the saturation within geographic area. 70% of customers come

from churches, competes not on price, but on quality and premium.

o Looks at SROI from customer, employee, investor, and volunteer perspectives.

Vincent Yip, Deputy Director, McKinsey, helps HKCSS as

consultant

o Defining and measuring SEs in HK, to help SEs understand their performance

and identify area for improvement, not to compare across industries.

o Studied cases from aborad, to arrive at recommended definition for HK. UK

CICs need to pass a community interest test, asset loc, dividend cap

constraints. In Finland, theres no specific legal stipulation, but more than 30%

of staff must be disabled or long-term unemployed persons. In the US, social

enterprise alliances use broad definition.

o In HK, 80% are subsidiaries of NGOs, and in some cases under-

performance is condoned as funding can be sourced from mother NGO .

Investors are not encouraged to participate given the non-profit mentality of the sector.

o Arrived definition of SE: Operates as a self-sustainable enterptise, if possible providing reasonable return to

shareholders, and provide material help/ assistance to people in need through employment or training,

and/or community engagement through raising awareness or getting people to actively participate in

volunteer work.


8/15


9/15

Sat 13 Nov

Yesterday, there were numerous calls for SEs to band together and cooperate, create a sense of cooperation

and solidarity, between the civic sector, government and private sector. Partnership is very important. SEs do

not have business secrets, and are very different from other businesses. For each sector, what role should they

be doing? A multilateral panel provides some answers.

Prof Stephen Cheung, Dean of School of Business, HK Baptist

University

o Partnership Seed Fund set up in 2006. They encourage NGOs to submit SE

proposals to us, and hope that company partnerships are included, to ensure

sustainability.

o If the SE just takes the subsidy, might as well be a social service. Spent

over HK$80 milliion in supporting organisations, but only about 30% sustain

themselves, 30% cant cope, another 30% are struggling.

o To get the business sector to use govt funding, it is difficult to instill fiscal

discipline, as the books get mixed.

o Some SEs apply for a million dollars, but their proposal doesnt add up

to that sum. We have to teach NGOs business sense, doing calculations is

a must!

Christine Fang, Chief Executive of HK Council of Social

Serviceo Who should solve a problem social welfare or social enterprises? We

have to recognise that some social problems do not lend themselves

to market solutions. And government should not shirk its responsibility.

o Because we have a halo, it;s easier for social workers to mobilise talent

and funds. When it comes to empowerment and building of social capital

NGOs have the technical know-how to do it.

o Weaknesses we dont have business sense, we dont know when to

stop, dont make any calculations on cost efficiency. We also do not

have the marketing creativity, because we dont grasp the market in

detail. We do not see different approach in writing of proposals.

Dato SJ Wong, venture capitalist

o Coming from the business sector and an investor. To engage in SEs, they will tell you all kinds of things, but

dont know whether they can fulfil these things. We see a lot of projections that are full of promises. But

when we put in funding, most of the time they dont fulfil, and we become skeptical.


10/15

o Therefore we evaluate whether they have business experience and acumen. We need to see a niche in the

business world, they will be able to employ underprivileged and yet generate a product that will be

competitive in the business world, very hard to ask customer to buy for charity.

KO Chai, HP, venture capitalist, now heading Community

Investment Inclusion Fund

o If we are looking at todays SEs, there are 3 different models. Profit generator,

non-profit generator (joint venture with NGO).

o Company having a fair play concept built into its culture, is one step towards

social responsibility (good stewardship).

o Community Invesment Involvement fund enables people to have self-confidence,

to return to regular lives. Our assessment is very stringent, there are a lot of

performance measurements.

o Some social welfare agencies just want to help the people, not interested in

revitalising the community, model is still quite strange to them. Its about social

development, taking social work to the next level. Many people dont understand what social capital is.

Raymond Lim, accountant involved in development of SEs

o 4 of the 8 HK universities will start operating SE courses. Some of them are talking about service learning.

Some universities are operating SE clubs, and alumni come to schools to share their knowledge.

o SE is a charming word, but none of the students keen on working in a SE know how to balance their books.

o For entrepreneur programmes, can we add social entrepreneurship? The theory of social entrepreneurship

is totally diferent students still like investment banks.

Florence Hoi, Secretary for Home Affairs, SAR

o Role of the govt we are a facilitator, and we want to create incentives. To promote

peoples understanding of SEs, to foster inter-disciplinary cooperation (HSBC-

SEBC), for the younger generation to encourage them to have interest in SEs, and

providing funding support through 2 schemes.

o SEs face a challenge as they dont have much commercial sense. Enterprises have

a lot of experience, and through the fund we can match them with SEs.

o We are talking about responsible consumption here these products may be a bit

more expensive, so people have to think differently.

o If one is to scale up and do a IPO, would it be conflict with the govt funding basis? All govt funding is

oriented towards NGOs. There are many methods of finance, we can provide just the seed fund. If your

business is successful, you can do joint venture, Section 88 doesnt mean that SEs have to remain small.

o We provide funds through the Enhancing Self-Reliance through Partnership scheme. Tung Hwa is a good

example of a commercial company which has transformed into a social enterprise.


11/15

Patrick Cheung, Honorary Executive Director, DiD HK Limited

o Dialogue in the Dark HK DiD HK doesnt follow the German model exactly they

change franchisee to friend-chise.

o Said that DiD HK wont apply for govt funding. The core of the issue is that govt

defines SEs as a way of alleviating poverty. We have a very competitive market

how can we create a market out of the bottom billion?o Ashoka says that social innovation is the most important thing. There are lots of

social needs, and they can crreate business opportunities. If we can think out of

the box, then SEs can become a platform for economic development. This is

the positioning in Singapore, beyond poverty.

o Young people should gain experience in the business or social sector, before starting a social enterprise.

Lily Lapenna, Founder and Managing Director, MyBnk Ltd

o One in 20 youths in the UK is in debt, or dont believe they have to pay

back their debt. My Bnk (text speak doesnt have vowels) was started

to address this need. It provides microfinance and enterprise skills for

youth.

o Her experience started in 1999, as a village teacher in Zimbabwe, and

followed with a 2003 stint with Grameen/BRAC in Bangladesh. Met

Michael Morton, godfather of SE in London in 2007, and was inspired

to start My Bnk.

o My Bnk pilot in Tower Hamlets, and now has 7 full-time staff, serving

over 20,000 youths. Area coverage is London and southeast UK.

o Runs financial education workshops to generate income, hopes to be

financially self-sustaining by 2012.

o They have an ethical screening process for corporate partners, looks

at whether banks invest in renewable energy, for example.

o They help kickstart young SEs, and some policy work through lobbying for financial education to be included

in the school syllabus.

o Social Franchise model: wants to set up 5 international franchises.

o Fortune cookie saying she likes: I dont have a solution, but I admire the problem.

o My Bnk has a 90% repayment rate most who default are those who have learnt the most, and need to sit

down with a teacher to analyse where they have gone wrong. Some can pay back loans by doing a few

hours of community service.

o My Bank uses other banks for banck-end. They dont have a bank license per se, and so cant earn interest.

My Bnk keeps savings and loans separate. They are registered as a charity.

o My Bnkers are democractically elected in their respective schools, they run the banks themselves for 1

academic year.

o Lily was awarded the Young Social Entrepreneur of the Year in the UK (2008).


12/15

Tom Mehrmann, Chief Executive, Ocean Park Corporation

o Ocean Park is a no-for-profit statutory body, with a mandate to inspire education

and nature conservation presented in entertaining means.

o DNA is framed around CSR free entry for people with disabilities and elderly,

gives out thousands of tickets every year.

o Runs a Conservation Foundation, uses biodegradable packaging, hires peoplewith disablities, buys food from a social enterprise, F&B trainee programme for

youth-at-risk in culinary arts, celebrates International Day for People with

Disabilities every year.

o Be genuine, not just generous.

Wong Sau Ying, Head of Corporate Communication, HK and

China Gas Company Limited (Towngas)

o Checks on alarm bells in elderly homes, no other public utility will do this, so its

easy for them to do an additional chekup.

o Works with HK Fair Trade Association for their FT corner. Also the end user of

FT products, in their customer service restaurants. Also have some beauty

products like facial masks which are packaged by mentally challenged patients.

o Partnership with Tung Hwa hospitals. Business opportunity in designing pre-

packaged menus with seasoning, which people can order at the office and store

in their office fridge for bringing home, to help them to eat home instead of eating

out. This helps out their catering business.

Fred Sheu, Director of Marketing and Business Development, Hewlett-

Packard

o Global Citizenship is one of HPs 7 corporate citizenship values. 5 main areas in Social

Investment, Privacy, Human Rights & Labour Practices, Environmental Sustainability,

Ethics & Compliance.

o 2% of global warming is caused by IT e-waste.

Timothy Ma, Executive Director, Senior Citizen Home SafetyAssociation

o If we understand what the mutual need is, then we can cooperate. We should also

care for corporates, its the beginning of a relationship, eg. calling them when they

are in trouble.

o We have an interactive relationship. As a SE, we have to focus on the things we are

best at.


13/15

Social Investment Forum

Yvonne Li, Founder/CEO, Avantage Ventures

o Avantage Ventures bridges the information and funding gaps between social

entrepreneurs and investors in Asia.

o Social entrepreneurs should have at least tried out their product to test the

market.

James Chen, Chairman, Chen Yet-Sen Family Foundation, and Chairman, Legacy

Advisors

o Talked about yak cheese industry in Yunnan. Yak cheese has 8% fat, double of butter, but no tradition for

Tibetans to make cheese. But cheese has 10 times the economic value of butter. They gave Ventures In

Development a grant to improve hygience and marketing, to help resolve issues of bacteria count and yakky

taste of cheese. Project viability is still uncertain, due to logistics concern and marketing reach.

o Just providing money is not enough funders need domain expertise in order to evaluate the product .

o Grants vs loans can have unintended consequences. We could have disadvantaged particular families by

giving out capital equipment, need to ensure level playing field.

o Key questions to ask: How areyou giong to market product? How are going to sell the product? How are you

going to price the product? What is the value proposition to the consumer?


14/15

Scott Larson, Director of Business Development, SOW Asia

Foundation

o Every organisation has some kind of yakkiness, need to make sure that all

those gaps are covered.

o Each seed has the potential to become a pumpkin, and that potential lies within

each seed, but cant be realised without the right conditions.

o The supply of money exceeds the number of good ideas if you take the

time to nurture your seed.

o They look for self-sustaining ventures to provide oportunities for the well-being of

society, providing what they call compassionate capital. However, they are also

a not-for-profit charity expecting to raise funds.

o Relationship with both investors and social enterprises needs to have integrity. Both in terms of content,

truthfulness of deed following speech, as well as moral.

o Criteria they look out for: Clear social impact, Plan for financial sustainability, Entrepreneurial and innovative,

Interest in expanding model, Committed to highest legal and ethical standards.

Site Visit to local SEs

Noahs Ark

o Noahs Ark itself is the first joijnt public, private and citizen sector

project. Government provided the capital for the building, and the

profit goes into a sinking fund, which goes back to government.

o The project is managed by 5 Christian NPOs Chinese YMCA of

HK, The Media Evangelism Ltd, Angela Lyuk Education

Foundation Ltd, Boys Brigade HK, and St James Settlement.

o The project promotes 3 big goals love of life, love of family, and

love for Planet Earth.

o Key to success is common vision. They measure their success

by how well they are working together, how they achieve their

goals, and whether they are financially sustainable.

o Rainbow Gallery within Noahs Ark sells hundreds of products

suppled by 14 different social enterprises from HK, mainlandChina.


15/15

HK Social Enterprise Summit 2009

Documents

Transcript of HK Social Enterprise Summit 2009